The values of the cryptocurrency market have dropped significantly. Most of the coins lost as much as 80 percent of their value from a few months ago. Economist Tyler Cowen, however, sees this as positive and awaits … crash.
In an article published on the Bloomberg website, Cowen, a professor at George Mason University, wrote that price busting may be beneficial for the cryptocurrency market. It can prepare the ground for something big in the future. He referred to the 19th-century railway bubble and dotcom’s mania from 2000:
“Internet stocks fell sharply after the [dot] dot-com crash between 2000 and 2002, but this in turn cleared the [weak] market from weak companies and paved the way for another technological revolution, including the creation of Amazon and Google.”
We are waiting for the new Amazon
Soon, we may have to wait for a bust on the cryptocurrency market. The fall in the prices of digital currencies and tokens will not necessarily mean, however, according to the economist, “the end of technology or [a decrease] in its importance”.
Cowen notes that cryptocurrencies have increased from zero to nearly $ 800 billion, making the market attractive to investors. Now, however, he thinks it’s time for the market to turn into a “diet”. “The end with easy money” – because that’s how ICO sets out in your text. The economist also notes that the fall in prices has led to more discussions on how to make cryptocurrencies more relevant, while protecting investors’ funds.
“We’re at the point where cryptocurrencies have to finally prove their social value, but what can that mean? Imagine using a cryptocurrency as a tool for micropayments on the Internet. Or maybe you’ll use a blockchain to verify your identity instead of informing someone about you on the phone about four the last digits of your social security number, “Cowen suggests.
He also asks an open question about the actual nature of cryptocurrencies. If they are to be only a “new gold”, their brightness will soon fade.
“Think about bitcoin and other crypto-assets, as about a company that finally receives a call for payment. I’m slightly optimistic, but it’s time to get up or close,” he concludes.